Working Well With Grantees

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1 Working Well With Grantees A Guide for Foundation Program Staff Build better working relationships with grantees

2 About the Center for Effective Philanthropy Mission To provide data and create insight so philanthropic funders can better define, assess, and improve their effectiveness and, as a result, their intended impact. Vision We seek a world in which pressing social needs are more effectively addressed. We believe improved performance of philanthropic funders can have a profoundly positive impact on nonprofit organizations and the people and communities they serve. CEP seeks to contribute to the achievement of this vision through the data primarily comparative data we develop and draw on in our research, assessment tools, and programming and communications. This data helps funders understand how they can improve their performance and provides insight on key elements of foundation effectiveness. We recognize that many other institutions and organizations dedicated to improved funder effectiveness must also play a role for the vision we seek to become a reality and we seek partnerships with these organizations when they will help us to better achieve our shared goals. Although our work is about measuring results, providing useful data, and improving performance, our ultimate goal is improving lives. We believe this can only be achieved through a powerful combination of dispassionate analysis and passionate commitment to creating a better society. For more information on CEP, please visit Authors Ellie Buteau Phil Buchanan For more information, contact: Ellie Buteau, Ph.D. Vice President Research ext , Inc. All rights reserved.

3 Table of Contents Introduction: The Crucial Role of Program Officers 4 Forming Strong Relationships with Grantees 6 A) Understanding grantees goals and strategies 8 B) The grant selection process 10 C) Understanding fields and/or communities 12 D) Initiation and frequency of contact 14 Providing Assistance Beyond the Grant 16 to Grantees Providing Operating Support 19 Making Your Reporting and Evaluation Process 21 Helpful to Grantees Preserving Relationships While Declining 23 Funding to Nonprofits Conclusion 26 Online Resources 27 Appendix: Characteristics of the foundations 29 represented in the data used for this document 3

4 Introduction The Crucial Role of Program Officers Foundations and grantees are often working on the toughest, most heart-wrenching social problems. The stress and strain of that effort makes working productively together especially challenging. This difficulty is only heightened by the power dynamics that exist in a relationship in which one party possesses resources the other needs. This context makes it all the more important that foundations understand how to work well with grantees. Grantees perceptions of foundations are powerfully affected by their relationships with foundation staff. They perceive foundations as making more of an impact on their organizations, communities, and fields when they feel these relationships are strong. Those who work as program officers at foundations are integral to the experiences that grantees have with foundations. Indeed, to the grantee, the program officer often is the foundation. 1 No matter the issue areas in which a program officer is working or the policies of the foundation for which a program officer works, a program officer has the ability to profoundly influence grantee experiences. In fact, our research shows that, in some respects, the program officer matters more to the experience that grantees have with foundations than does the foundation itself. 2 That is particularly true of the following: Grantees level of comfort with approaching the foundation when a problem arises Grantees perceptions of the foundation s level of responsiveness How fairly grantees feel they have been treated by the foundation Grantees sense of the strength of their relationship with the foundation Which party tends to initiate contact foundations or grantees The extent to which grantees receive assistance beyond the grant As we have noted in other publications, bad relationships extract a real cost. Disrespectful, incompetent, or just plain unavailable program officers affect the nonprofit sector on many levels. They not only frustrate grantees but also can reduce grantees ability to achieve the very goals that foundations fund them to pursue. To make both grantees and foundations more effective, foundations must pay more attention to the hiring, training, and evaluation of their program officers. 3 1 Marcia Sharp, Philanthropy s Current and New Stakeholders: Building a Common Vision for an Expanded Future, Forum of Regional Association of Grantmakers (1999). See also Joel J. Orosz, The Insider s Guide to Grantmaking (San Francisco: Jossey-Bass, 2000). 2 In 2007, CEP originally published information about the degree of variation in grantees experiences that could be explained by factors that vary because of the program officer with which a grantee works and the degree of variation in grantees experiences that could be explained by which foundation a grantee received a grant from. See Kevin Bolduc, Phil Buchanan, and Ellie Buteau, Luck of the Draw, Stanford Social Innovation Review (Spring 2007). Those analyses were updated in 2011, and the updated data is shared above. 3 Ibid. Interviewees 4 Amy Berman Cathy Cha Chris Kabel Title: Senior Program Officer Title: Senior Program Officer Title: Senior Program Officer Tenure: 8 years Tenure: 9 years Tenure: 8 years Foundation: The Foundation: Foundation: John A. Hartford Evelyn and Northwest Health Foundation Walter Haas, Jr. Foundation Location: Fund Location: New York, NY Location: Portland, OR Asset Size: $514MM San Francisco, CA Asset Size: $68MM Asset Size: $463MM Working Well With Grantees: A Guide for Foundation Program Staff Eric Kelly Title: President Tenure: 3 years (president since June 2013) Foundation: Quantum Foundation Location: West Palm Beach, FL Asset Size: $142MM

5 Working well with grantees requires effort, but it s worth it. It is through its grantees that a foundation pursues its goals. As Jeff Raikes, CEO of the Bill & Melinda Gates Foundation, put it, Those partnerships are our lifeblood. 4 In short, program officers are crucial to effective philanthropy. Although most funders understand the importance of program officers relationships with grantees, few resources exist to help them understand and strengthen those relationships. Scarcer still are resources that are based on large datasets of information collected from grantees about what they value rather than conjecture, opinion, and anecdote. So whether you are a new program officer or a seasoned veteran, we hope you ll find in this guide information that can help you strengthen the way you work with your grantees. We ve worked with more than 285 foundations, large and small, community-focused and global. The findings we share in this guide are based on data from tens of thousands of surveys of nonprofits conducted by the Center for Effective Philanthropy during the past decade. In this guide, we have updated, summarized, or expanded upon findings from six of our publications that focus on how foundations and grantees can best work together to provide you with practical ideas for working with your grantees. (All of these publications and other related resources are available on We also share some new analyses, not previously included in our publications. Finally, we were able to segment and analyze our data to identify program staff whose grantees rated their experiences highly and we ve asked them to provide tips and examples of how they approach some of the most difficult aspects of nurturing and maintaining productive relationships with their grantees. This guide is organized into five topic areas. Each features findings from our research, insights from highly rated program officers or foundations, and a blend of ideas to consider from our research findings and the highperformers we have identified and interviewed through our research. Context is everything. For example, while offering assistance beyond the grant may make sense for some foundations, it may not for others. Does providing assistance beyond the grant fit into your foundation s strategy? Are you sure your grantees want it? Does your foundation really know how to provide it? Are you prepared to monitor the effectiveness of such assistance? Only after careful consideration of questions like these will it be clear what is best for your foundation. So we offer this guide to prompt reflection and raise questions but not with a promise of easy answers. We hope this guide helps you to work well with your grantees to achieve the results you seek. Ellie Buteau Phil Buchanan 4 See Jeff Raikes letter on the foundation s website. Jeff Raikes, Grantee Perception Report Summary 2010, The Bill & Melinda Gates Foundation (June 2010), Justin Laing Title: Program Officer Tenure: 7 years Foundation: The Heinz Endowments Location: Pittsburgh, PA Asset Size: $1.4B Dana Miller Title: Senior Program Director Tenure: 5 years Foundation: M. J. Murdock Charitable Trust Location: Vancouver, WA Asset Size: $852MM Tara Seeley Title: Senior Grants Officer Tenure: 9 years Foundation: Central Indiana Community Foundation Location: Indianapolis, IN Asset Size: $622MM Ken Thompson Title: Program Officer Tenure: 15 years Foundation: The Bill & Melinda Gates Foundation Location: Seattle, WA Asset Size: $34.6B Introduction 5

6 Forming Strong Relationships with Grantees You have likely learned from experience just how important it is to form good relationships with the nonprofit organizations you support. Our data indicate that without good relationships between funders and grantees, grantees are less likely to perceive that foundations are having as much impact on their organizations, communities, and fields. Building those relationships, particularly with the unequal power dynamics that exist between funders and grantees, is not always easy, though. Our analysis of thousands of grantee survey responses suggests that a good funder grantee relationship is one in which grantees feel positively about their interactions with foundation staff and about the foundation s communications. Our research and analysis show that forming a strong relationship can be greatly aided by foundation program staff members who: understand grantee organizations goals and strategies; provide a selection process that is helpful and does not put undue pressure on grantees to change their priorities to receive funding; understand the fields or communities in which they are funding; and have the right balance and frequency of interactions with grantees. Working well with grantees requires effort, but it s worth it. 6 Working Well With Grantees: A Guide for Foundation Program Staff

7 CONSEQUENCES OF POOR FUNDER-GRANTEE RELATIONSHIPS Poor relationships can have negative consequences for foundations and grantees. Grantees who do not perceive their relationships as being positive share frustrations and concerns like the following (as with all of the quotations in this guide, these are real comments from grantees about specific foundations): It all depends on who you get as a program officer... Mostly, I have had amazing program officers, but at least once I got a really bad one... complete waste of my time... didn t get us and didn t want to... A big service improvement might be to be able to switch PO s if you feel that it isn t working out... Grantee Our relationship with the foundation has changed in recent years. We used to feel like we were equal partners, attempting to solve social issues together. We felt like we could be wholly honest about whatever bumps in the road came up and could rely on the foundation to trust us to proceed as best we could to solve them. However, in the past three years, we feel that this relationship has changed. Site visits feel more like interrogations. The grant-review process feels like the foundation is attempting to find the flaws in what we are proposing, rather than to have a peer-to-peer discussion about what works, what doesn t, and how we might consider working together. We sense a lack of trust in grantees, an approach that causes us to be far less forthcoming. Grantee The irresponsibility, rude and inappropriate behavior, and disregard for field-based expertise of the program officer in charge of [our program area] is severely hampering the ability of the foundation to continue to do its good work. There is consensus throughout the [issue area] community that he is damaging the ability of the folks on the ground to do great work. Grantee Positive communication is sorely lacking. The negativity coming out of that office has caused our organization to look for a new source of funding. Grantee Over involvement: Despite the best of intentions by our program officer, her and the foundation s insistence on frequent communication with confusing, contradicting, and generally unhelpful advice has strangled this project. Grantee The foundation needs to have more respect for and accountability to its grantees. It seems to be largely pursuing its own goals and interests, and manipulating grantees to meet its own needs. The foundation needs to be more timely about requesting and responding to proposals, more transparent about the funding consideration process, and more open to working with the interests and needs of grantees. There is also a trend of verbally assuring funding that may or may not actually materialize. This is frustrating and embarrassing to all concerned. Grantee The foundation, its staff, priorities, and processes are constantly changing. The first program officer with whom we worked was impossible to reach. She rarely returned phone calls and was unable to clearly articulate the grant proposal and funding process. Grantee They are simply impossible to work and coordinate with. The staff, in general, is snippy, bossy, and unpleasant, top to bottom. Grantee When hiring staff members, think carefully about how good they are at interacting with different kinds of people in a respectful way. I have seen some staff be really condescending to people who they didn t think mattered. When that happens, people in the community talk, and it gives the foundation a bad reputation. Grantee Forming Strong Relationships with Grantees 7

8 Forming Strong Relationships: A) Understanding grantees goals and strategies TIP First and foremost, a strong relationship is based on understanding what your grantee is trying to accomplish: its goals and strategies. Foundation and grantee goals and strategies may not always fully align, but it is crucial to grantees that their program officers understand their organizations work. While it may seem obvious that an understanding of grantee goals and strategies is essential if program officers are to forge strong relationships with those they fund, some program officers with whom we have worked reject this idea. They argue that their interest is their foundation s goals and strategies that grantees are simply a means to an end. But program officers who were highly rated by their grantees said that taking the time to understand grantees goals and strategies is a crucial part of their work. Tara Seeley, a highly rated program officer from the Central Indiana Community Foundation explained, My approach is to have lots and lots of open-ended questions and to assume that I don t know anything. In an hour s conversation, what I continually find is you can come out knowing so much more than you thought you would come out knowing. When answering open-ended questions, the organization s leadership really does tell you a lot about what you need to know. supports. Being able to meet grantees and see what they re doing demonstrates that you care about what they re doing. You understand where they re coming from, he said. You re not just sitting back in your office and reading a report once every six months. It s enough of a priority to carve out a couple hours from your afternoon or morning and actually see them in action. This perspective also improves their grantmaking, highly rated program officers said. It helps program staff develop the understanding they need to make better decisions. Grantees, meanwhile, speak of their frustration when program officers and foundations do not work to understand them. I would really like [the program officer] to take the time to understand our strategy, said one grantee. Once in a while, encourage an application based on our programs and goals instead of insisting that we simply follow theirs or be denied funding. TIP Chris Kabel, a highly rated program officer from Northwest Health Foundation in Portland, Oregon, said he takes the time whenever possible to travel to see the work of the nonprofits the foundation 8 Working Well With Grantees: A Guide for Foundation Program Staff

9 Ideas to Consider Ask questions to understand grantees goals and strategies. Does your understanding of what grantees are working to achieve, and how, match how they would describe their work? How do you know? Do you know what your grantees strengths are? Their areas in need of improvement? Talk with grantees about where they are in the life cycle of their organization. Are they growing? Shrinking? Are they at a more stable point? How does this relate to their goals and strategies? When possible, get out of the office and interact with grantees in person. Meet the grantee organizations staff members during site visits and see their work in action Attend events or meetings held by your grantees Attend presentations made by your grantees Forming Strong Relationships with Grantees 9

10 Forming Strong Relationships: B) The grant selection process The selection process is a crucially important time for grantees in shaping their relationship with their funders. It can help grantees feel supported or feel pressured to modify their priorities to receive funding. Although some elements of the selection process are constant for all program staff within a foundation, you can be more or less helpful within that process. For grantees, first impressions count and the selection process is often where those impressions are formed. TIP When grantees experience a selection process that is not helpful, it can have negative repercussions on the relationship, especially when the process involves what they see as wasted time. Don t ask an organization to spend months on proposals for something which [the foundation] has no intention of funding, said one grantee. The highly rated program officers we interviewed put a concerted effort into making the selection process helpful for grantees and the foundation. Justin Laing, a highly rated program officer from the Heinz Endowments in Pennsylvania, has a keen awareness of the power dynamic that exists between his foundation and grantees. During his time as a program officer, he learned that he can t totally put the power dynamics away. Having been a grantee, when I first got here, I really wanted to believe that I could just forget it I could make it nonexistent. But you can t because there really is a big power difference. The main thing for me is being more conscious about the power pieces. Seeley also consciously works to remember the power dynamics that exist in her interactions with grantees. I don t think I ever say, I m aware there s a power dynamic here in the room and let s just put that on the table, but I try to be a really respectful listener, Seeley said. I also try to be extremely straightforward. TIP The highly rated program officers we interviewed say they try hard to establish a respectful process that involves give and take in crafting a proposal that meets the needs of the grantee organization and the foundation. We host a grantee forum where we invite anybody who is interested in applying for a particular program to learn about what the program is trying to achieve and what we re hoping to see in competitive proposals, said Kabel. We also answer questions they have that are relevant to their particular programs or initiatives. I d say almost all of our grantees probably already know how they fit into our program s goals and strategies by the time they get a grant from us. TIP TIP 10 Working Well With Grantees: A Guide for Foundation Program Staff

11 Ideas to Consider Consider how the selection process can be helpful to grantees. Gather organizations either in person, on the phone, or virtually to: Share what the foundation is trying to achieve Discuss what the foundation is looking for in proposals Answer grantees questions. Ensure you are available to respond to questions as grantees go through your selection process Seek to be prompt, clear, and consistent in your replies Help grantees understand how they do, or do not, fit into the foundation s goals and strategies. Some foundations create letter-of-inquiry processes to help grantees get a quick read on their potential fit Be conscious of the power dynamics. Stay conscious of the power dynamics when communicating with applicants or grantees Listen attentively and well Be mindful of whether grantees are compromising their priorities to receive your funding and what that might mean in terms of the quality of the relationship and the likelihood of successful execution Forming Strong Relationships with Grantees 11

12 Forming Strong Relationships: C) Understanding fields and/or communities TIP Your relationships with your grantees are stronger when they believe you have real expertise and are applying it in your work for their benefit. When grantees sense that foundation staff do not have knowledge relevant to the communities in which they work, they frequently worry that opportunities for impact are being squandered. When ratings of a foundation s understanding of the field are low, grantees raise concerns regarding the relevance of the foundation s goals and whether the foundation s strategies are sufficiently informed by the facts on the ground. It is, therefore, crucial that you bring your relevant expertise to your relationships with your grantees. Grantees understand that program officers are in a unique position to access, develop, and communicate information about the communities and fields in which they work. But not all program officers take advantage of that distinctive vantage point. As one grantee said, It feels as though the foundation is only listening to a limited group who is not in touch with the struggles of everyday people. One of the things that we try to do is synthesize information from two different directions, said Kabel. One would be the nationally published and researched data about what sorts of interventions or initiatives are most effective. The other direction is in the community, so it s community readiness to engage on a particular issue. When you have that sort of sweet spot between the community readiness to mobilize on an issue and validation from the research base that such an initiative is actually likely to have the intended impact, then that s where we can play a role as funder. Funders frequently overlook one of the most relevant sources of information of all: the people they, and their grantees, are trying to help. Our research has shown that among funders, the minority that routinely collect data on beneficiary perceptions through surveys, focus groups, or convenings have a better understanding of progress and the impact they are having on the fields and communities in which they work. 5 At the Evelyn and Walter Haas, Jr. Fund in San Francisco, a highly rated foundation that focuses on immigrant rights and integration, senior program officer Cathy Cha understands the issues firsthand: She is the child of immigrants. But she knows that her experience alone is not enough to understand the diversity of the foundation s beneficiaries. About once every quarter I get an opportunity to meet with someone whose loved one has been deported or an immigrant housecleaner who is concerned about her kids, Cha said. And I get a sense of what life is like for them. As foundation folks, it s important to have that grounding and to keep it real. Laing agreed that the development of expertise contributes to stronger relationships with his grantees: In the arts, the more that you understand someone s art form, the more they will open up to you. Because that s what really inspires them. For highly rated program officers and foundations, developing and maintaining their expertise is challenging requiring significant time, effort, and resources. They say, however, that it is time well spent. 5 Ellie Buteau and Phil Buchanan, The State of Foundation Performance Assessment: A Survey of Foundation CEOs, Center for Effective Philanthropy (2011). TIP 12 Working Well With Grantees: A Guide for Foundation Program Staff

13 Ideas to Consider Learn from grantees experiences. Attend grantee conferences and events Through reporting and evaluation processes, take the time to talk with grantees about what they have learned Stay abreast of research in the field. Seek out or commission research about the community or field in which you are working Develop ties to experts and others to call on for consultation and feedback Read the relevant publications in your field and stay up-to-date on changes and innovations Attend relevant conferences Talk to other funders who are working in similar areas Understand those you seek to help. Meet with people who are part of the target group that the foundation seeks to serve Find or create opportunities to hear from beneficiaries in a rigorous, representative way through surveys or focus groups Collaborate with other funders in affinity groups to share information and co-develop strategies. Speak regularly with your fellow program officers at other foundations working toward similar goals Find ways to exchange knowledge and insights with these other funders Take advantage of professional development opportunities to develop expertise. Spearhead or actively participate in meetings at your foundation that tackle issues of importance, such as approaches to diversity and inclusion, exit strategies, social media, and capacity building Enroll in classes to develop expertise, such as lobbying and restrictions for nonprofits or leadership skills Forming Strong Relationships with Grantees 13

14 Forming Strong Relationships: D) Initiation and frequency of contact How often foundations and grantees are in contact, and who initiates that contact, matters for how strong grantees perceive their relationships with foundations to be. Our data indicate that quality of communication trumps the quantity, but quantity still does matter. Grantees do not perceive their relationships with foundations to be as strong when they are the ones initiating most of the contact. Yet, about a third of grantees say they are the ones most frequently reaching out for contact. Program officers who initiate contact with grantees as frequently as grantees initiate contact with them, or reach out to grantees more than grantees reach out to them, tend to have stronger relationships. her grantees if she stays in communication with grantees. She said she tells grantees, If you experience a problem, let me know and we ll figure out what to do next. Some 75 percent of Kabel s grantees said that he contacts them as much as they contact him. He said that the contact improves his understanding of what is going on with his grantees. We moved beyond the point where every organization feels like they need to present the rosiest possible scenario and the most polished description of what they re doing and can actually talk to me honestly about some challenges that they are facing, as well as how they might overcome those challenges and become stronger as organizations, he said. It is also important that contact with grantees happens more than once a year. In our dataset, almost a quarter of grantees report having contact with their funder only once a year or less. Grantees who report yearly or less frequent contact with their program officers rate their relationships less positively. Additional dialogue during the funding cycle would be helpful, said one grantee. Perhaps two to three conversations during the year or one visit to the foundation office. Grantees are also sometimes unsure about how much interaction a foundation is willing to have. We nonprofits walk the line of pushing too much for interaction but sometimes not asking for it often enough, said one grantee. It helps, she continues, when foundations are clear on when and how often they re able to interact with us. The value of initiating contact and doing so with appropriate frequency is clear to the highly rated program officers we interviewed. Seeley believes it is in the best interest of her foundation and 14 Working Well With Grantees: A Guide for Foundation Program Staff

15 Ideas to Consider Reach out to grantees. Try to initiate contact with them as frequently as they do with you, or more often Talk with grantees about your level of availability. Set expectations early in the relationship so grantees know what to expect Ensure that you check in with all grantees more than once a year. Tailor the amount of contact to what makes sense for the grant size provided, centrality of a grantee to the foundation s mission, and the length of time the grantee has worked with the foundation Consider which grantees might benefit from more frequent contact, and at what points in the relationship more contact would be helpful to the foundation or the grantee Forming Strong Relationships with Grantees 15

16 Providing Assistance Beyond the Grant to Grantees It can often mean the difference between making a grant and making an impact. The majority of CEOs and program staff we have surveyed about providing assistance beyond the grant indicate that it is important both for the achievement of foundations goals and for the achievement of grantees goals. As one program officer said, It can often mean the difference between making a grant and making an impact. The enthusiasm for helping grantees in ways that go beyond the grant seems only to have grown over the past decade, with an increasing number of reports and resources aimed at technical assistance, capacity building, or highengagement grantmaking. 6 But, providing assistance beyond the grant is not always the right call and it s certainly not a onesize-fits-all solution. First, providing assistance beyond the grant requires a commitment of time, money, or expertise. It is important to consider whether your foundation is able to effectively offer the sort of help we outline below. Second, you need to know whether the nonprofits you work with even want, or feel they need, such help. Our research shows that only three percent of program staff always conduct a formal needs assessment to determine what types of assistance to provide to grantees. In addition, few consider what assistance grantees are receiving from other funders: This is, in fact, one of the least-considered factors when program staff are making decisions about what assistance to provide. In our research, we asked grantees which of 14 forms of assistance their organization receives from a particular foundation funder (See Figure 1). About half of grantees report receiving any assistance beyond the grant. Most grantees that receive assistance beyond the grant receive just one or two forms. However, grantees appear to derive minimal benefit from such little assistance. Our analysis suggests that it is most helpful when grantees receive a comprehensive set of assistance efforts that span an organization s needs, or a number of field-focused forms of assistance (five was the average number in our research) that help grantees be knowledgeable about and connected with the fields in which they work. A grantee receiving comprehensive assistance from a foundation would experience, on average, eight or nine of the forms of assistance listed in Figure 1, including the following: 1. Some focus on the management of the grantee organization, such as general management advice, strategic planning advice, or help developing performance measures 2. Activities related to the field in which the grantee works, such as information about research or best practices, introductions to leaders in the grantee s field, or the opportunity to attend seminars/forums/convenings 3. More technical forms of assistance, such as information technology assistance or help with marketing and communications A grantee receiving field-focused assistance from 6 See Peter York, The Sustainability Formula: How Nonprofit Organizations Can Thrive in the Emerging Economy, TCC Group (2009). T.E. Backer, J.E. Bleeg, and K. Groves, Evaluating foundation-supported capacity building: Lessons learned, Human Interaction Research Institute (2010). Kirsten Grønbjerg and et al., Nonprofit Capacity Assessment: Indiana s Arts and Culture Organizations, 2010, The School of Public and Environmental Affairs at Indiana University (2010). Grantmakers for Effective Organizations, Expanding the Impact of Grantees: How Do We Build the Capacity of Nonprofits to Evaluate, Learn and Improve? (2011). TIP 16 Working Well With Grantees: A Guide for Foundation Program Staff

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